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Us 53, Greece 31, America 28, United States 19, Mr. Reid 17, U.s. 14, Washington 12, Boehner 12, Imf 8, Korea 8, Colombia 7, Mr. Fleming 7, Reid 6, Mr. Schumer 6, Mr. Durbin 6, Eurozone 5, Ronald Reagan 5, Mcconnell 5, Alabama 4, Panama 4,
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  CSPAN    U.S. Senate    News/Business.  

    July 29, 2011
    9:00 - 11:59am EDT  

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other bank regulator. it's also important to note that the cfpb is likely to help small businesses by helping improve competition in small business lending by insuring that consumer financial products which are used by small businesses are fair and transparently priced. small businesses want to use fair and transparent products. second, the cfpb can help small businesses by helping small business customers. when consumers feel confident that they won't get caught by financial product tricks and traps, they're going to go have greater willingness to make purchases, including from small businesses. and the cfpb can help protect against consumer asset bubbles and thus smooth the volatility of consumer spending. that means a more stable business environment which benefits small businesses. in short, the cfpb has limited jurisdiction over small businesses, it's subject to numerous safeguards, and it may be able to help increase the
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efficiency of small business lending by increasing consumer confidence and spending stability. thank you very much. .. >> providing consisted of a horse and buggy when they started. mr. fleming is testifying on behalf of the truck leasing and rating association that -- mr. fleming, you five minutes to present your testimony. >> thank you, mr. chairman. thank you mr. altmire. as you said my name is daniel
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fleming, i'm president of fleming national lease in springfield, virginia, and our company as a member of the truck renting and leasing association. i'm testifying today on a troubling aspect of the dodd-frank act, namely section 1071, the small business loan data collection provision. fleming national is a family owned business with 18 public employees locations in springfield, virginia, thailand over marriage. we are a proud member employing 100,000 people and operate a 24,000 locations throughout the united states. not only are there members small businesses themselves, but the vast majority of the customers that we deal with are also small businesses in search of vehicles and equipment offered for rent or lease at a reasonable price. part of the process and acquiring rented or leased vehicles is to fill out an application of credit. as written section 1071 as extensive to application
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requirements. these requirements will be offered by and monitored through cfpb. while resorting to operate a bank, under the definitions listed within this new law i am considered a financial institution because i have an application for credit from my customers. in my opinion small business data collection provision is counterproductive, contradictory, costly and confusing. the provisions counterproductive in the cfpb was created with the intention of giving consumers protection from the predatory lenders and allowing them to find more options for information and obtaining a loan, instead is not intended to regulate commercial loans and lenders. section 1071 is contradictory in the statutory language conflicts with existing language already on the books. my understanding has been section 202.5 of regulation v. under the ec '08 explicitly says the creditor shall not require -- and quite about race, color,
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national origin or sex of an applicant or the personal information should have no basis in determining whether or not someone receives a truck from fleming national lease. in terms of cost, this could cause a real strain on my bottom line. according to section 1071, after linda inquired whether in up to four loan is minority, women-owned or small business, no one involved in a credit decision can have access to this information year this would require me, the so-called lender under this definition, to completely alter my application process which would be expensive. if we were to comply with this new regulation i estimate we would have to at a minimum have to hire a new part-time employee. that could cost our company somewhere between 10 and $20,000 annual. while it doesn't see much, for me it is money that could be spent hiring another mechanical purchasing a new vehicle, both of which makes my company more profitable. but instead would be spent on
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more administrative burdens. lastly, section 1070 what is extreme confusing and these many questions unanswered regarding what information i am to collect and what definition will be used to ensure compliance. there also remains a concern of whether or not the cfpb and the federal reserve will work jointly to rectify issues that could remain from any exemptions that exist. just to touch on this final point, since section 1070 emended ecoa, but the cfpb and the federal reserve now have jurisdiction over entities such as auto dealers. i believe it's imperative that if this new law was to be enacted and enforced, regulators must coordinate their implementation of these new requirements. if not, financial companies might receive different data from the dealers than that which would be required to file with the cfpb and open entirely new problem. while i recognize the fact the cfpb has now decided it will
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issue a formal rule that hopefully will address and answer some of the confusing qualities within the law, ultimately i remain unconvinced that there's even a reason to have such a rule implemented for businesses like my own. i'm not a banker. i these trucks. to be place in the same category as a multibillion dollar financial giant mix actually no sense to me. in my opinion making a truck leasing company or any small business comply with section 1071 is a mistake. thank you for allowing me to issue my testimony today. >> thank you, mr. fleming. questions? i will start with mr. jones. on a scale of one to 10, how would you rate the cfpb's outreach on the mortgage disclosure forms, that they occur in the process of revising? >> -- they are currently in the process of revising?
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>> i would rate them at a six or seven, especially compared to previous regulatory form changes. i think they really have reached out and provided an opportunity for our members and members of the mortgage lending community to comment on those forms. >> with your four years of mortgage lending experience, can you tell me what happens if an entity is seen by its customers as being abusive? >> i think, if an entity is seen by its customers as abusive, basically they stop using the lender. i think good businesses in our business and any business have to be close to the customers. and that i think is one of the real benefits of being a small business and being located with their customers in the same towns and going to the same meetings and the same social function, same churches. so it's critical that you have
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good customer relationships. >> mr. sharp, we hear frankly that there is a fight between main street and wall street. however, our economy is interconnected and we must make sure both are healthy if you want to grow our economy. can you tell me about the impact the financial regulations will have for main street small businesses? >> yes, mr. chairman. thanks for the question. as i said in my testimony, it's hard to know exactly what the impact will be. i think we heard that from the first panel as well. it again, our concern is that, you know, small businesses have the hardest time and most expensive time really complying with new regulations. and as you know, there are a flood of regulations headed their way. in this case in particular, again our concern is that some companies may be directly regulated, didn't expect to be
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regulated as my fellow panelist, mr. fleming, as mentioned, and others may find that their access to credit lines or to credit instruments that they rely on our even more expensive or unavailable. so there's no way to know for sure what the impact is going to be. but those are the two areas where we are hopeful that there won't be an adverse impact. >> can you tell me how small businesses use the equity in their home to finance small businesses, particularly in the early stages of developing? >> sure. i think it's pretty widely accepted that particularly the very smallest businesses, the two guys in a garage kind of, very early stage of a small business, and i think if you look at google are some of the real tech giants these days you can trace almost all them back to again a couple of guys in a garage with either a personal credit card or someone borrowing against their house or borrowing against their car. of course, you grow out of that stage at some point and you have
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access to the capital markets. but each of those tools which are not designed to be for commercial lending have become critical lifelines for small businesses. >> based on your experience in observing the cfpb, do you think they are prepared to assume authority, or do you feel that they have been rushed? >> well, you know, a year sounds like a lot of time, but italy not to stand up a brand-new agency. particularly when you have responsibility to sort of gather up the law and i think seven other agencies, i think 19 statues they are consolidating under one roof. so we do have a concern that they're moving awfully fast. on the transfer date they began to issue, the cfpb began to issue interim final rules which essentially says this is the final rule but we are going to kenya, take comments and adjust
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as needed. and in some cases that's probably good. in some cases we may have concerns. we're trying to keep up as well. by don't think a year is enough time for the bureau took on active, particularly without he confirmed director. i think that creates serious challenges for them. >> mr. fleming, you mention compliance costs in your testimony, but can you reiterate how much will it cost your business to comply with the new data collection requirements? >> again, trying to underestimate we could potentially have to add at least a part-time clerk, which for us is such a small business, it's so flat, that showed a significant investment for us for really a position that doesn't add to the bottom line. i prefer to spend those funds on, as i said, a mechanic or equipment that add to revenue for our customer. we are constantly looking for good qualified diesel technicians to fix her trucks to help produce revenue for the company.
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while again i said one part-time position seem small, that really would be better used in a revenue-generating i position rather than just an administrative burden to comply with potentially new federal regulation. >> do you feel taken advantage of by the banks you work with? if so, switch banks or provide? >> week, actually we did switch our banking relationship. i wouldn't say felt taken advantage of, but just didn't feel that it was working for us and we had a relationship with banks out in ohio and changed those banking relationships. i think is other members of the panel said, it's a free market and there's certainly plenty of other opportunities for us and we took advantage of other opportunities when they presented themselves. >> mr. levitin, according to the office of advocacy, small businesses create seven out of every 10 jobs in america. yet in a recent article you claim that small businesses our
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contribution to long-term stable employment is limited. do you disagree about the small businesses and helping our country cover -- recover from 9% and appoint? >> no, i do not disagree with that. i point out what is it is entirely consistent with a small business administration's office of the advocate. that small businesses create tremendous number of jobs every year. but the general store a small businesses unfortunate is failure. so instead you just get churning rather than stable long-term employment. >> as a professor i would assume you see the valley of lawyers drafting contracts, and communing agreements to writing. this creates certainty. how can in plain language you increase certain in contracts? i can see by in getting rid of some legalese but don't contracts require some specific line which that cannot always be made into quote unquote plain language of? >> it depends on the specifics
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here. so, i think the cfpb, i think we are question is going, how is the cfpb going to help make markets more efficient. and getting rid of unnecessary legalese is a good i think everyone would think is a wonderful thing. that's move on. but as you point out not everything can be boiled down to legalese. the second part is simply ensuring when a business goes out, or consumer, a consumer goes out and compares financial products, they compare them on an apples to apples basis. this is difficult to do right now with many financial products. it's not like going to grocery store where there's unit pricing and you can see the cost for an ounce of orange juice of brown's one an ounce approaches for branching. many financial products are designed in the way they are too complex to compare on an apples to apples basis done with the all in cost would be good. the cpb may be able to improve that by encouraging standardization of financial products to the things that consumers really want.
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>> thank you. mr. altmire. >> thank you, mr. chairman. mr. levitin, i wanted to follow up on a question i as to the earlier panel regarding the fact that many entrepreneurs use personal credit cards and home equity loans to finance new business ventures, many of you mentioned that in your testimony. how should in your opinion the cfpb account for the small business owners went drafting regulations, specifically for credit cards and home mortgage products? >> well, as someone who uses a small business credit card for some purchases, i think it's important to note that many small businesses use the same credit card for both business transactions and personal transactions. and so see you going and filling up your car with a tank of gas and use that car partially for business use and partially for your personal use. you want to make sure, i think you would want the same
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protections on that transaction because you don't know whether you don't know whether that catcher putting in the tank is going to be used for when you're driving your kids to a soccer game or whether you are using it for work. you don't know at that point whether you doing a business transaction or not ultimately. and in situations like that, small business owners should have the same protection that they have when they are consumers. >> mr. jones, over the past three years we have unfortunately learned that bad mortgages are costly to everybody, and to be successful, your business in particular has had to make loans that borrowers can repay. is there in your opinion a potential benefit to the mortgage industry if the cfpb's ability to repay rules are structured appropriately? >> thank you for the question. yes, i think so. the ability to payroll again, if
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it's characterized as a safe harbor, which will provide a bright line, especially for small lenders that don't have the ability to hire the compliance staff, if you have a 25 person business and you need to hire an attorney to help you with rules and regulations, it becomes a very burdensome, very burdensome endeavor. so it's important if they do you characterize it as a safe harbor, that is clearly interpretable by small businesses. i think it will be a fast boom to our industry and to the consumers of america as well. >> thank you. for mr. sharp, meaning the banking industry have expressed concern that the dodd-frank act will stifle lending to small businesses, another point many of you brought up. has the small business committee been struggling to get credit from banks since well before the financial reform was enacted?
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and is this something that could be done perhaps outside of this law or something different to help correct for that? >> thank you, mr. altmire. the answer to the first part of your question, yes. i mean, the challenges of small businesses phase in the credit markets right now are not, you need to 2011 or 2010. they been around for several years and they have been stagnant. it's not improving and that's a real concern. honestly, at this point i think part of what, part of what everybody is hearing is let's not do anything to make it worse. it's not exactly clear what it is that is coming up the works, but what we know for sure that again, the commercial lending markets are not frozen but they are not in good shape. our message and the message we're hearing from our small business and main street is certainly let's not take away these tools that seem to be working well.
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we can still use her credit card. we can still borrow money against our car title or our home, even those markets are functioning fairly well. so their message to us is, is do no harm essentially. and that means working closely with the cfpb to make sure they understand, to the small business world and actions they are taking. >> thank you, mr. chairman. >> mr. west. >> thank you, mr. chairman. thanks to the panel for being here today. mr. sharp, i'll ask the first question to you, and other on the panel can chime in. what do you really see in your assessment the purpose of the cfpb to be? >> i believe the purpose of the cfpb is to find fraudsters and consumer products market and put them out of business, or clamp down on their fraudulent practices, protect consumers against bad actors in the market. >> anyone else? >> i would say that is part of
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the mission, but its broad. cpb's mission is to ensure that we're fair, transparent and competitive consumer finance market. that's not just getting rid of fraud. that's also ensuring that disclosures are clear and that we can have good price competition in the market. >> have we had prior to this any other government agency, someone else was doing this? do we see this as a redundancy, or do we see this as some type of duplication of effort out there from the government? >> prior to the dodd-frank act, some parts of the consumer finance space were regulated by a laundry list of federal agencies. and this is one of the problems. that you had a regulatory market that were splintered. so you had the federal reserve, the fdic, the office of comptroller, supervision, even the department of defense and head each having little spaces
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in the market and many things fell between the cracks. and also the consumer protection mission given those agencies was typically secondary and subordinate mission to other missions. particularly the bank safety and soundness which is just a fancy term for bank profitability. the only reason to do then is that are profitable. banks don't do them for fun. they didn't get their profitable. if you're the council of the currency under primary mission is ensuring banks are profitable, that put you in a bind will you be tempted to turn a blind eye to abusive practices because they are profitable. that's what we saw. that's what led up to the housing bubble. >> so in your assessment, for the panel, this was something that we need to institute. this was an agency, a bureau or a government program that we needed to institute? >> without a doubt. the financial crisis in 2018 out
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of consumer financial products, out of mortgage products. that was the root of it. and if we want to assure that doesn't happen again we need a better consumer financial protection. >> i will just say, you know, it's no secret that the chamber didn't support the creation of the consumer protection bureau. and at this point our focus, it's there. it's up and running. it's no longer an idea on paper. and you know, our concern now is as it is beginning, as they do is beginning to turn and begins to issue regulations and begins to do its work, our concern is not become sort of a duplicator of other agencies work. there are some cases, at least one very obvious on with the federal trade commission, whether viewers jurisdiction and the federal trade commission jurisdiction over let. and it was intentional to some degree, and a lot requires two agencies to prevent, prevent sort of stepping on each other's
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toes. to prevent situations where they're duplicating each other. but we do have a general concern that that be very difficult to avoid. >> mr. jones, mr. fleming, do you believe the cfpb will enhance free market competitiveness and entrepreneurial spirit, or not? >> mr. west, thank you for the question. i think, we were happy to see the cfpb's move towards consolidating the truth in lending and the good faith estimate disclosures, to forms that have been a challenge for the industry being administered by two separate, formally by two separate federal agencies that did not always see eye to eye in terms of what should be done. so we do think there's real benefit there. another benefit to our industry could be is that our industry is very heavily involved in
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automation in order to do, to comply with multiplicity rules and wrecks that we have and to the extent i was very encouraged today to hear that the cfpb will be doing an economic cost-benefit analysis to really determine whether or not, and to the extent that is what we do, and i think they can be a boom, not onto the industry and help to lower some costs, but it also will be a boon to consumers who hopefully will have less confusing and clear disclosure. so definitely are some benefits. >> mr. west, since i'm a truck and not a banker, i would be hard-pressed to express an overall opinion as the cfpb. what i'm concerned about is just a new regulations that seem to me as someone sitting down in springfield, virginia, shouldn't really apply to me all of a sudden coming down or creating new transcending our requirements. so from that perspective i'm
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concerned about that section, but over all i'm certain not in a position to register an opinion on the group as a whole. thank you. >> very well. mr. chairman, i yield back. >> thank you, mr. west. if you had, to each of the panelists, if you could identify just one top issue that bothers you about cfpb, the top issue you think ought to be changed or improved, to improve it, what would that be? mr. jones. >> thank you, mr. chairman. i think our top issue with the cfpb will be the clarity of the issues, or the clarity of the rules and regulations that are issued. and the ability to receive and respond to industry input prior to those regulations being implemented. >> mr. sharp. >> mr. chairman, our primary,
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the changes were pushing for primarily our structural. it's very difficult i think we've all discussed today to know exactly what problems may arise and when and what sector. so what we are advocating for is expanding, you know, replacing the single director with the panel and ensuring the safety and soundness isn't compromised through a more effective check by the prudential regulator's. so at this point we think sort of the best long-term hedge against, you know, poor policymaking by this agency or any other independent agency is sort of collaborative decision-making at the top, diverse, you know, sectors, bipartisan input. so that's our top priority. >> mr. fleming. >> mr. chairman, i think i would just ask the organization to take into consideration unintended consequences such as these data collection requirements that may be in
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theory would be of interest and be helpful to the organization, however be burdensome to us small businesses who would have to comply with these new regulations to supply the data. >> i will give a rather different answer. i think if the two most important things the cfpb on that one, the senate should confirm a director. and number two, if you really want to start changing the scope of cfpb regulation, i would strongly urge subjecting auto dealers and realtors the cfpb regulation. there is not a very good principled argument for exempting them. >> thank you. mr. altmire, any -- thank you. i want to thank you all so much for taking the time for coming up to capitol hill and testifying today. on this very important matter. with that, the committee is adjourned. [inaudible conversations] [inaudible conversations] ;5b
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>> the u.s. senate is about to meet for a quick session before recessing while senate democrats meet behind closed doors to
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discuss the debt ceiling legislation in the house and senate. that meeting to begin shortly after democratic leader harry reid and republican leader mitch mcconnell give their statements on the floor this money. the senate plans to return at 11 eastern for about an hour of general speeches. after that senator reid may offer a bill. now to live coverage of the senate here on c-span2. o god, who covers the heavens with clouds and prepares the rain for the earth, you take pleasure in those who have reverence for your name. bring peace to our nation and world, as you fill us with your spirit. empower our lawmakers to break
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through stalemates with constructive action. give them such wisdom that their challenges will be met with corporation and competence. lord, help them to comprehend the global repercussions of some poor decisions and the irreversibility of some tragic consequences. energize them with your power and guide them with truth and light. quicken their ears to hear, their eyes to see, their hearts to believe, and their wills to
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obey you before it is too late. we pray in your merciful name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, july 29, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable christopher coons, a senator from the state of delaware, to perform the duties of the chai. signed: daniel k. inouye, president pro tempore.
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the presiding officer: the majority leader. mr. reid: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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the presiding officer: the majority leader. mr. reid: i ask unanimous consent that the call of the quorum be termed. the presiding officer: without objection. mr. reid: following any leader remarks #-rbg the senate will recess until 11:00 p.m. today at tha--to allow for a democratic caucus. at 10:00 a.m. we will have that caucus. at 11:00 a.m., the senate will be in business until 12:00 noon. at noon, i will be recognized. that's the order before the senate now, is that right? the presiding officer: the majority is correct. mr. reid: mr. president, although the house of
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representatives has not yet voted on speaker boehner's plan, that plan is flawed. that's why they've struggled for days to pass this inadequate legislation without a single democrat even being involved in the process. they have plowed forward looking only to republicans. but as this battle to pass a continuing resolution went forward, to keep our government open for business just a few months ago, the republican leadership realized they were not able to get the necessary votes for the c.r. and they reached out to democrats. speaker boehner had looked to democrats. he didn't have enough votes. obviously he should have looked to the democrats again. that's the way we need to move forward oforward, on something s bipartisan. that's the way it's supposed to work, democrats and republicans working together for our country. a band-aid approach to a world crisis is an embarrassment to congress, frankly to the country and to the world. that's a sad commentary.
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the united senate democrats, all 53 of you have informed the speaker that his legislation was doomed in the senate because we would not vote for a short-term extension of the debt ceiling. it would put our great nation on the path to another default extravaganza we've experienced in the last few weeks. frankly, that new extravaganza would start in a matter of weeks again. virtually every expert -- economists, rating agencies, market analysts -- they've said the kind of short-term plan the speaker has proposed is no answer to the crisis republicans -- they created the crisis. and what they want to do is no answer to it. if we're really trying to avert the kind of financial calamity that default would bring, the republicans' plan is not a solution. i had a very sobering conversation a half-hour ago with secretary geithner.
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right now the businesses can't borrow -- businesses survive on moving money from bonds and other things. that's how the world economy works. they can't borrow more money because no one knows what the interest rate will be tomorrow. so the republican plan is not a solution. as the experts say, all too soon we would be back in the midst of partisan wrangling with our economy once again held prisoner by extremists in the party -- the republican party led by the tea party. mr. president, our economy cannot bear this kind of uncertainty any longer. congress and the white house are on longdown. the business of the -- are on lockdown. the business of the scun is not being conducted. i say no, not again, will we fight another battle in which we are now engaged. we can't do that. that's why a short-term
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extension is not what we need. and it's not what this congress will do. but, you know, mr. president, default is not an option either. but we cannot wait for the house any longer. it's time for republicans to stop the political games and embrace compromise. no matter how long republicans delay, the deadline will not move. we have hours -- i repeat, hours to act. that's why by the end of the day -- today -- i must take action on the senate's compromise legislation. the legislation in point would cut $2.5 trillion from our deficit over the next decade and avert a default on our national debt t would protect social security and medicare without raising a penny of revenue. the question is, will today's republicans break away from the shrill voice of the tea party and return to the republican party of ronald reagan? this is likely our last chance to save this nation from a default. i've invited senator mcconnell
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to sit down with me and negotiate in good faith, knowing the clock is running down. i hope he'll accept my omplet i can't do this alone. there's only 53 of us and your honor the rules that the republicans have -- and under the rules that the republicans have put in place -- it used to be used sparingly but it used all the time now, we'll need to have 60 votes. a majority is not good enough. the bill offered by the majority is not good enough, in the eyes of the republicans. it is not certainly perfect in the eyes of the democrats. but together we must make it work for all of us, because it is the only option. it already meets the republicans' demands. john mccain, republican senior senator from arizona and president obama's opponent in the last presidential election, has asked his party to compromise. he did it here on the senate floor. he said, "it is not fair for the
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american people to hold out and say we won't agree to raising the debt limit." he called the radical republican approach "unfair" and "bizarro." it is time we listened to the markets, he said. it is time we listened to the american people and sit down and seriously gorkt. -- and seriously negotiate. former senator fred thompson asked the members of his own party to come to theirences is. "i respectfully suggest that you rake in your chips and stuff them in your pockets." he believes that -- i hope my friend, senator mcconnell will come to me and help to move the process along. my door is open. i'll listen to any idea to get this done in a way that prevents a default and a downgrade to our country's credit rating. the time is short and that is an understatement.
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too much is at stake to waste even one more minute. the last train is leaving the station. this is our last chance to avert a default. the vote on this compromise will determine whether we enter the frightening world of default. a vote for the senate compromise, we vote on the financial obligations of this great nation to pay their bills. i would ask my friends, my republican friends, break away from this thing going on in the house of representatives. they're going to vote at 4:30 yesterday, 6:30, 7:30, 8:30, 9:30, 10:30, and they finally quit. rumors flying around, mr. president. "the wall street journal" said they put too much money in for pell grants. they're going to take that owvment rumors flying around they need a balanced budget amendment. rumors that the speaker was seen in my office, which he didn't come. all these rumors, mr. president, that made no sense. and the scariest thing is late
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last night leader canter said from the house, he said, you have three choices -- bain he, quu--boehner, cut, cap, and bal, or default. that's the second rank leader in the house that said that. so a vote against the compromise that i've talked to -- listen to what my compromise is, mr. president. no revenue. the congressional budget office has scored it more than $2.4 trillion, which will take us to probably -- not probably, will take us to march of 2013. we can do the country's business. there is a joint committee that will be set up to see if we can do some good work on a more long-term approach and get back to doing our country's business. i repeat, c.b.o., o.m.b. has
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scored our bill for more than $2.4 trillion, not "billion" -- "trillion dollars." its a dollar for dollar, as the speaker said he wants, to reduce the debt. so a vote against this compromise will be a vote to default on the full faith and credit of the united states. i repeat to everyone within the sound of my voice, we have the framework of a bill. we're going to change it. i have some ideas that we need to chaifnlgt i want to discuss them with the republican leader. if anyone else has any ideas, come to me. but the time has come to make a decision. the time factors are very clear. why am i filing tonight on my bill. why? there's no more time. would i like to wait until tomorrow and see if there's some goodwill that comes from the republican side? of course i would. but i would suggest to my friends on the other side of the aisle, this is a pretty good deal. they in effect, as fred thompson
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said, have gotten everything they want and should put those chips in their pockets and walk away and declare victory. there will be no time left to vote on another bill or consider another option here in the senate. this is our last best clans to preserve the -- best chance to preserve the character and credit of our great nation. mr. schumer: would my colleague, our leader, yield for a question? mr. reid: i'd be happy to yield to my friend from new york. mr. schumer: i thank our leader. the leader has outlined it well. the house, for all its machinations, delays, struggles, isur because their bill will not pass, not become law. 53 of the 53 democrats have signed a letter saying they won't vote for it. the president has said he'll sroe -- veto it, all for a very simple reason, and that is because if you do this short term you don't calm the markets.
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and at the same time we start all over again in a few weeks going through this again. and so as the leader, is it true, the leader has said the bill he will put on the floor is our only chance. and the reason it is our last chance is very simple. after tonight, anything put on the floor -- is this true, mr. leader? after tonight if we were to put anything on the floor, given the rules of the senate, nothing could be voted on before default would occur? mr. reid: to the senator from new york, under the rules we have here in the senate, if i move tonight, we can't have a final vote until tuesday morning. the country defaults on its debt at 12:00 midnight on tuesday. mr. schumer: would the leader continue to yield for a question, a few more questions? mr. reid: be happy to. mr. schumer: that means this bill that the leader will put on the floor tonight is the last train out of the station.
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and it also means, given the rules of the senate, that only with bipartisan cooperation can we do it? so we are hoping, we are praying that our colleagues from the other side of the aisle, led by their leader -- 15 signed a letter talking about a bipartisan compromise as part of the gang of six or gang of eight, if that group could come forward and make suggestions -- not simply say the boehner bill because that won't pass. but what suggestions, what modifications to the reid plan, that is our only hope of avoiding default, and we must act now. is that a correct depiction of the status on the floor and of where we're headed? mr. reid: absolutely true. mr. schumer: i would ask the leader one more question. and if we're unable to come to a compromise on the leader's bill, there is virtually no time, no matter what the house does, for
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the senate to do anything before default is over? and that means our republican colleagues really have the ball in their hand in terms of default? mr. reid: i say to my friend, i have been told personally by republicans in the senate that they will do everything they can to stop legislation proceeding. now that's not a majority. it's a handful of people on the republican side of the aisle. that's why i said in my remarks i would hope the republican party will turn back to the party of ronald reagan. ronald reagan raised the debt ceiling 19 times during the time he was president. he was a man who kroeupld. that was -- who compromised. that is who he was. he was a man who hated communism. who is the man who brought down the iron curtain? ronald reagan. he was willing to compromise even with something who was bitterly spoken of in the worst
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terms. ronald reagan knew how to compromise. the day he was elected, he sent his embassy personnel to the soviet union so they could work with him. and that led to the great decision by our countries to bring down the iron curtain. mr. schumer: i see the minority leader is here, and so i thank the leader for yielding. mr. durbin: mr. president, i'd like to ask the majority leader a question. i'll make it brief. mr. reid: be happy to. mr. durbin: i'd like to say during the period of time we were waiting yesterday for a decision by the house of representatives, which they still didn't come to, during that period of time we had an opportunity to have many conversations, personal conversations, among senators, democrats and republicans. and i would say unanimously to a person, democratic and republican senators agreed that a default would be an economic
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disaster for the united states of america. the majority leader has been brief this morning by the treasury secretary about some of the prospects of a default. we've heard only one that i know of, republican senator come to the floor and say that a default on our debt could be managed very easily. i would like to ask, since i have heard from business leaders in the state of illinois of closings that were canceled, canceled, literally canceled this week for multimillion-dollar investments in the city of chicago and the state of illinois because of what's happening in the house of representatives, can the majority leader please tell us as much as he can at this moment the prospects if we do reach the point of a default on this national debt? mr. reid: i'm familiar with the situation in illinois. $146 million construction project was turned down at the last minute because they were so afraid of the credit. mr. durbin: if i can ask one further question, in terms of
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the impact on our nation, as the secretary of the treasury has told you, can you give us, for the record, what we face if the republicans in the house of representatives continue to delay and to hold to a strategy which has no hope of passage? mr. reid: secretary geithner said it's already started. the international community is extremely worried. they can only again overnight loans. and it's really precarious for our country. mr. president? the presiding officer: the majority leader. mr. reid: i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. mcconnell: mr. president, i suggest the -- i ask consent that the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: mr. president, not surprisingly, i have a little take on what's been happening in the last few days, and my good friend the majority leader and his colleagues. let me just explain what's been going on in congress this week. the american people have been waiting on us to do something to prevent default. they want us to end this crisis right now. and over in the house of representatives, you've got the speaker of the house doing his job. speaker boehner has been doing the hard work of governing, working day and night to put together a bill that can actually pass the house of representatives and end this crisis now. and he should be commended for his efforts. what about over here in the senate?
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well, the contrast couldn't be starker. rather than working the last few days towards a solution to this crisis the way the republican majority in the house has, the democratic majority here in the senate has been wasting precious time rounding up no votes to keep this crisis alive. rather than being responsible and doing their duty and come up with a bill that can actually pass, they have been busy signing people up for the not-good-enough caucus and ginning up opposition to everything else. lawmakers should be working a solution to the crisis, not a blocking strategy. our democratic friends here in the senate have offered no solutions to this crisis that could pass either chamber. not one. instead all day long yesterday we got chest-thumping comments about how we're going to kill any piece of legislation that comes over from the house, that it's dead on arrival. democrats are out bragging about how they're going to prolong the crisis instead of doing the hard work of trying to solve it.
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and that includes the president. look, if the president hadn't decide to blow up the bipartisan solution that members of congress worked so hard to produce last weekend, we'd be voting to end this crisis today. instead democrats in congress are still talking about blocking a solution to the crisis, and the president's rolling out new mileage standards today. let me repeat that. here we are a few days from when the secretary of treasury says we will be in a default situation, and the president of the united states is rolling out new mileage standards today. how about this? how about a plan from democrats in washington that can pass both chambers, prevent the crisis and protect americans from a worsening economy? i would suggest to my friends on the other side this morning, when they start taking their responsibilities as a majority party a little more seriously, because at this point the only people who are disregarding the consequences of default are
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senate democrats. not the republicans in the house, but senate democrats. republicans have been doing the hard work of governing this week. it's about time our democratic friends join us. mr. president, i yield the floor. mr. reid: mr. president? mr. president? the presiding officer: the majority leader. mr. reid: i really appreciate my friend's statement. i haven't been here at all but i certainly hard contacts to this statement. we're willing to work with him and his staff as we have to try to come up with a solution. i just want the record to reflect very clearly, as i said in my remarks this morning with my friend -- which my friend didn't have the opportunity to hear, we cannot have in this country a six-month extension, because a six-month extension is no extension. a six-month extension of what we're dealing with would put us back in a matter of weeks into the same, as i said, fiscal extravaganza, trying to move forward with the work of this
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country. the country is locked down. congress is inoperable. the white house is unable to do very much because they're focused on this huge problem we have with the debt. so i want the record to be spread with the fact that i will work as closely as i can on any suggestions i have. as i've indicated. but please, everybody, please don't come to me with a six-month extension, a proposal that i am moving forward on that fred thompson said take your chips, my republican friends, put them in your pocket and walk away. what that does is give the republicans everything they've asked for. no revenues, $2.4 trillion in cuts. that's a pretty good deal. and that is not a six-month deal. it's a solution that takes us until 2013, the month of march. help me work through this. i have no pride of authorship.
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if somebody can figure out another way to improve that suggestion i have, i will work with them. i have -- anyway, i'm willing to work with anyone. as i've said on the floor before, i've spent my life -- and i don't want anybody to consider this a sign of weakness. i have compromised my whole life. when i practiced law, that's what i did, trying to represent people and get a result. i felt many times i was a failure when i had to go to court. i went to court. over 100 times i've tried cases to juries. i always believed that compromise was the right thing to do, even in law. and as a legislator, it's a sign of integrity and confidence. if you say i will compromise. legislation is the art of compromise. and i'm here indicating to the world that i spent my whole adult life trying to compromise
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and build a consensus. the presiding officer: the senator from tennessee. mr. alexander: i ask consent for up to five minutes if that's agreeable with the majority leader. mr. reid: yes. mr. president, that's fine, as long as it's in morning business. mr. alexander: as if in morning business. the presiding officer: without objection. mr. alexander: mr. president, as one senator, i thank the majority leader for his comments and the republican leader for his comments. i believe we all know what we need to do here. we have two objectives. at a time when we're borrowing 40 cents of every dollar we spend, we need to reduce the debt. and, two, we need to honor our obligations. we know why we need to do it. there's no one on the republican side of the aisle that i know of that thinks that we shouldn't honor our obligations. we know that on august 3, that there will be not enough money to pay all the bills. we don't want the most credit-worthy nation in the world to go to a place where it begins to pay its bills
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selectively out of a cigar box, which is why, mr. president, i'm hopeful, i believe all of us are hopeful that we can find a way for the majority leader and the republican leader to recommend to us and the house a solution that the president will sign that will reduce our debt and honor our obligations. but to suggest that the majority leader's proposal, his bill, which he offers in good faith -- i know -- is a compromise is a little hard to accept. i mean, it's a democratic proposal. the other side has spent most of its time this week saying, can we get 53 of us to make sure that as soon as the republican proposal passes the house, if it does, we'll beat it in an hour. we won't even consider it. we'll kill it. we're not going to vote on it. we'll gable table it and put -- we'll table it and put it away. that's not the spirit of compromise.
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the proposal that the speaker is trying to pass may be about the only thing he can pass in the house of representatives. and that might not be what a democratic senator -- senate would like, but, you know, this is a democratic senate. that's a republican house. we have to come up with something that both can pass and the president will sign. we all know that. so i hope that the spirit of today and of tomorrow and of sunday is that we spend less time plotting about how we can defeat each other's proposals as quickly as possible and more time working together to come up with ways to reduce spending and honor our obligations. the democratic whip is on the floor. i've probably undermined his support in some groups by complimenting him for his courage. but i support the same thing he does, for example, the work in the gang of 16 is supported by
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one-third of the senate, a very good example for the rest of us in the senate about what can be accomplished when we work together. so i hope that -- i hope that we'll recognize that the speaker is trying just as hard as the majority leader to come up with something that can pass the house. the majority wan majority leades something that can pass the senate. it must be passed by both. we must reduce our spending and honor our obligations. every single senator knows that. i thank the senator and i yield the floor. the presiding officer: under the previous order, the leadership time is reserved. and under the previous order, the senate stands in recess until 11:00 a.m. recess:
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>> greek finance minister evangelos venizelos was in washington, d.c., this week to me with the international monetary fund officials about his countries that crisis. on july 21 european leaders agree to $157 billion loan package on top of a similar amount last year. mr. venizelos took over as the greek finance minister in june. he serves as the country's deputy prime minister. this is about an hour and 10 minutes. >> let me welcome all of you this evening to our peterson institute for international economics for a uniquely important and unusual session, with the vice president and minister of finance of the
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hellenic republic. mr. venizelos has been here in washington all day talking i was at the international monetary fund to put the last part of the current economic reform package together. he obvious it comes to us after a busy week in europe last week, a very successful results that he will talk to us about. we have a lot of greek connections you at the institute, and our greek friends tell us that his name is translated into messenger who brings good news. so we are certainly and hoping that he will fulfill that mission with us tonight. the vice president, of course, assumed his position as minister of finance just over a month ago to take charge of the reform
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program and the greek response to the economic and financial difficulties of recent time your he was previously . he was previously, minister of defense. in earlier governments he observed in four or five different ministry of functions, including in 2004 in charge of the athens olympics. so we all saw much of his wonderful results at that time. he has been a professor of constitutional law at the aristotle university. he has published widely legal textbooks, books on politics, and so is widely known in intellectual circles increase as well. i'd also like to recognize the ambassador of greece with whom we worked to put this program together. and without further ado, i would like to recognize, introduce and
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look forward to hearing vice president and minister evangelos venizelos. [applause] >> good evening. thank you very much for the very warm introduction. thank you very much for the invitation, it's a great honor for me to be here in this very prestigious institute. it's a great opportunity for me on behalf of government to present the last events on eurozone in my own country. ladies and gentlemen, greece is the center -- the center.
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with the factor that the greek crisis develops within the eurozone, with strong currency and very strong economic and fiscal response overall. however, while performance is first public debt and deficit, the trade balance, inflation and unemployment does not justify such strong challenge. it exists in particular, the eurozone has a lower fiscal debt issued and a lower public debt compared to the united states. greece as you know maybe represents just 3% of the eurozone debt, and only 2.5% of your joan -- eurozone gdp.
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represent '06% of eurozone public debt. however, the inclusion of this countries support problems, the european union, the european central bank and the monetary fund has not prepared them. with a% of eurozone debt, particularly with 25%. i remind you that italy belongs to the g8 and has relatively low fiscal deficit. on the other hand, greece ranks in the 27th position in the national league instead of the bottom of its economy with a gdp which is significantly greater than that of ireland. small size compared to the
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eurozone, the program of protection and contraction was definitely easy to engineer. in the beginning, the quality mechanism for greece was set up with him bilateral loans from eurozone member states and imf involvement. this problem amounted to euro 180 million for the period of 2017. the problems for island are based on mechanisms established in italy after the original program was developed. this mechanisms our european financial stability facility, which corresponds to the eurozone and european financial stabilization mechanism. meanwhile, the eurozone, the e.u. for support mechanism
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states, found in a state of fiscal crisis, the debt crisis and this new mechanism, the european mechanism, what injured in july and -- with provision of collective action. now, eurozone member states are ratifying this mechanism by volumes. the picture is simple. for almost five years, the crisis of the financial system was followed by massive strife. this led to the exposure and aggravation of fiscal problems in many countries. the financial crisis becomes fiscal crisis. the fiscal crisis in turn causes problems in the banking system, which owns state bond. in this case, increases? no, the crisis is more complex.
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it's not just -- the excessive part of the deficit and the current account deficit that reflects the deficit of the greek economy. and excessive size of consumption in relation to protection. therefore, -- [inaudible] at all levels. first of all, on the fiscal level, bite reducing the deficit, securing the liability of the greek sovereign debt and organizing a system and efficient administration. at the level of the real economy, by drastically reducing the decay of economy. at the level of the modern for development, by structural changes that may greek economy competitive. this requires distraction from business and refusing capital,
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combating, providing for justice, securing stability of legislation, and transforming greece into an investor friendly country. this project is very ambitious. must be achieved in just three years. fiscal deficit from 15.5% in 2009, and 2012. the need for dramatic increase of state revenues is of course intensified, which markets are 9.39% in 2011, according to the last information of the bank of greece. the problem of the greek economy
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must move along, one fiscal and one for growth. because of the crisis, many contradictions became apparent and are being addressed. this contradiction exists since the period of the foundation of the modern greek state back and 1827. greece's difficult future collided with typical picture at all three levels. history tells us that increase, -- that in greece, place after the creation of the state which was inspired by the existing weapons of early 19th century. problematic public administration, create interest, tax evasion, a lack of
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resistance against state power. a form of flexibility in practice are not exclusively greek. but in this case, however, this combined and creating a big picture for the world state in the world nation. in greece there is well. there is property and incomes that are not just sources for growth, but a big part of real estate and even bigger real estate from private enterprises. there are also high and middle incomes, and to our incomes that are also -- [inaudible] and on the other hand, there are some middle income with annual income between 12 and 60,000
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euro. over the past 20 months, we have been implementing an ambitious program for the adaptation of the economy in all sectors. they were indeed delays and problems. we declared and i accept this. we have to face, however, are insisting challenge the markets about whether it was indeed viable, sustainable, or whether the greek government, the citizens and business would produce fruit without radical investment to sustain that debt. the greek fiscal debt problem, as well as the eurozone fiscal debt problem in general, is the same applies to the united states. not a federal union as the united states.
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that is common currency which plays an important rational role, but is similar to those in the united states, does not exist in the european union and the eurozone. the european central bank cannot act like the fact of the united states because the lack of a strong federal government requires the acp to sell as the main unifying factor to the eurozone. this is achieved through policy, stable prices and controlled monetary places. the stability factor for euro, the eurozone is governed by strict fiscal as the current levels of deficit, 3% of gdp and the levels of debt, 60% of gdp. the political decision end in the eurozone is nothing
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institution like the u.s. presidents and administration. together, with the u.s. congress. it's 17 different governments that operate within 17 parliamentary systems. dependent and cooperate with 17 different political and electoral sites. the eurozone has strong governments but enjoy fresh, while minority governments, governments that prepare for elections in two weeks. it's always very difficult for the governments to ask for approval in order to provide assistance for other european countries like greece, portugal or ireland. taxpayers always say the same, europeans -- it is difficult to
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take the financial assistance when it comes to real money. open to participation and assistance of the imf. which has vast experience and know-how. this is the real reason the prime minister is in here in washington today. after spending seven months, greece has to begin now stability through some major policy. voting. the strategy program and implementation with increasing core part is, the european central bank and imf. and on issues of privatization brogue room, we must also remember the program aims at
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euros 50 billion of revenues by the building combination attacks by market with italy and spain, adds to the need -- for the stability of the greek sovereign debt. the stabilization of a great financial creation despite this is vital for eurozone own self protection. the eurozone 10%, a strong message of support for itself and its currents. the eurozone sign july 25 in cooperation with the private sector. public and private sector together got -- the stability of
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the greek debt. [inaudible] the servicing costs is significantly reduced. for the next 30 years stabilize at the levels a low 50%. for the first five years in 2016th there is provision for an even lower rate of the annual budgets. the new official date, 3.5% and within a year grace period. in the secondary market they are able with initial of euro 26 which equals 12% of greece's gdp. the private sector in majority
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for healthy years our exchange greek government bonds of phenomenal value of euro, 175 billion, that expire in 2020, and stay participation on the issues level of 90%. this is guaranteed by the public sector. after this major that ensures the stability of the greek public debts, we can breathe easier but now we have to implement the problem and to make delivery. our first duty is to implement the problem, perceiving with structural changes, privatization. our goal is to return to positive growth and create primary supplies by 2012.
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everyone has also realized that the fiscal level is powerful tool is absolutely necessary. after a world war ii president truman and also a program for greece which had suffered huge losses. that program was known as the marshall plan. now we have a new european marshall plan, with main contribution from the european commission, the european structure of france, the european investment bank as well as its member states. initial amount of 20 billion is already available in the e.u. funds for greece. this is the plan we discussed with the u.s. government, with secretary of state hillary clinton in athens and here in
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washington with secretary of the treasury, timothy geithner. there are many interesting areas such as energy, and real estate in this plan. the u.s. support is strong, and i'm sure you can take it very -- back and forth. overall, the support provided by the u.s. is particularly important for greece, for the eurozone, for the international economy and the global economic. your support especially to the imf is vital for us, but also for international stability. if i may say, the support is in the interest of the united states as a living power of the global economy. we are partners. in the previous two years, as you know after the warm introduction, as minister for defense, i had the opportunity to work with the u.s. administration, with secretary gates, and nato in very
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essential and crucial issues against pakistan, libya, against piracy, the fight against national terrorism, and in the recent weeks, last five weeks as minister of finance i find myself in the battlefield of debt, deficit and economic growth. in his last five weeks, i've had the opportunity to really seal -- see the positives. the state of the eurozone sign july 21, and active participation of the private sector of this involvement, and addressing the problem of the greek population come is giving new momentum. [inaudible]
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inside and outside greece. i'm referring to greeks of diaspora, the greeks of american and the greek civil community which is the largest in the world. together, we will succeed in rebuilding our country, restoring its fiscal independence and achieving the competitive position in the international market. we can do this and we will do this. challenge for the primacy, the government and for me, the minister of finance. but by and large, it is a challenge for the greek people, a proud people with me skills. thank you very much. [applause]
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>> mr. minister, thank you very much for those very helpful and illuminating remarks. we also thank you for being willing to answer some questions. for me, my colleague, jacob kirkegaard, and our audience. they'll be very interested to ask you for some further elaboration on the points you made. i would also like to into just two of your colleagues that are joining us on the platform. mr. george zanias, the chairman of the council of economic advisers of the government of greece, and mr. petros christodoulo, the general director of the public debt management office.
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>> in greece. responsible for the situation. [laughter] >> he will get many questions i am sure. mr. minister, let me start off by asking you a bit about the domestic politics of this issue in greece. you have outlined the very ambitious adjustment program, reform program that your government has adopted. you have now agreed with your european colleagues and i presume with the international monetary fund to carry out that program. we are all aware. we read the newspapers. we watch television. we have noticed that there has not always been unanimous support for your program at home. so-called talk to us about the domestic politics. how will you be able to ensure
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effective implementation of the program? do you anticipate that there will be widespread support now that the package has been put together in brussels last week? give us your assessment of how it is going to play out in athens and throughout the country. >> okay. thank you very much for this opportunity. as you know very well, the main difference between united states increase in institutional level that is in greece we have traditional parliamentary system of governance. with institutional frame of european continental parliamentary system. the investment groups between government, government a majority parliament, first of all the so-called major opposition, the main party of
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the opposition is always very controversial. because of this controversy, contradiction is vital for the existence of the opposition. during a conventional period we are ready to accept these rules and this practice, but during a period of historical and extensive crisis, it's absolutely necessary both for the government and the opposition who organized, and national platform for the reconstruction of state, the civil society, of the national economy and also of the name of our nation. here in washington, d.c., i am the representative not only of the greek government and the
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greek ruling party, but also for the greek political system. i in your also as a representative of the opposition. and i speak before us, not only on behalf of of my friends, but also of my friends have new democracy and other parties of the opposition. we hear some very important proof of concession before example the last main coding in parliament about the privatization, the majority was very fast, the majority of two-thirds. this message, the message of responsibility and cooperation was very useful and very
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fruitful for our work and for our negotiation. we reached a summit in brussels, and also very useful to the construction and the approval. we have without doubt problem. we have problem with public opinion. it's very difficult to implement that program with sacrifices. it's very difficult to cut revenues. it's very difficult to reduce tensions. it's very difficult to organize the new opportunity for the country through huge unemployment. it's very difficult to present a new national before the young generation. and because of that we need national unity.
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in greece we talk often about national unity. national unity is the political consensus. social cohesion is the strong, necessary for the implementation of strong policy with respect for all for the future. this is something very, very important. i don't believe in the linear approach of history. but we must reestablish the hope and perspectives for new generations. this is absolutely necessary and this is the national matters. it is not matters from the government, but to the international community. and thanks to you it's a great opportunity for me on behalf of of the greek nation to send is
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very clear, crystal clear message. and this is a matter of commitment because without this political and international commitment, without delivery, without the strong and systematic implementation of the program, it's not possible for us to present themselves, and also to present the necessary support from the international community. the commitment, the delivery, execution of the program, the implementation is our contribution. very huge. thank you. >> thank you very much. you mentioned the privatization. and i'd like to ask a little more about that as one specific element of your program. the imf and others have
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estimated that you have a very large amount of athens that might possibly be privatized. much more in fact many programs have have included so far. so looking for optimistic possibilities is this an area where you might over perform, we might be able to raise more revenue and achieve more success? [inaudible] [laughter] tell us about that. how you see the privatization, the timing, what elements would be in the forefront of that effort. >> the privatization program personal is a problem of structural changes. the greek public sector is a traditional one.
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with unacceptable dimensions, according to modern of the state and the public sector. the program of public entities, of entities of the so-called general government sector, the wider public sector, is a problem of structural changes as we need more clever, more structural and less expensive states. this program -- problem is absolutely vital for our budget, and also absolutely vital in order to achieve the main fiscal target for primary as soon as possible from the next year. but we have also the commitment and the obligation to contribute
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for the financial needs of our country, during the period 2014, july 2014. because of the new program has three main pillars. the first, main pillar is the new official support from eurozone, from the fs and also from imf. the second pillar is the private sector involvement. the third pillar is our own contribution through privatization. we need amount of 28 million euros by july 2014. for financial reasons, but also for structural reasons. we have also a second stage, additional amount of 22 billion
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euros from 2014 until 2015. this second stage, second chapter is also very important for financing the new debt buyback mechanisms. this new mechanism under the auspices of the ss is a very important mechanism because we need to cut the use of a nominal of our public debt. the list of privatization is very ambitious but also, i can make a distinction between privatization of entities, of so-called public companies, or of public rights, and to the privatization on the very
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interactive filter of the real estate. because the property of the states is huge. we have some estimations vary ambitious and we have also very good real estate property of private entities. and this field, the field of real estate is also very important for foreign investors in greece. income a nation with our main sectors, of our real economy, i start with tourism, but also for energy on the field of energy, the privatization program is very attractive. we can organize new fields.
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we can prepare new offices, but we have, we take the role that we need fires. because in order to construct new market, necessary to organize this relationships between development, and because of that, this occasion is very important for me to make this public announcement before american audience. because we need not only the support of our european partners but also the support from the united states. and first of all, the support of our greek american people here in washington, d.c., and in united states. >> so all those who would like to buy can come up to the front at the end of the meeting. [laughter] will ask only for 10% finders fee as part of the arrangements,
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minister. let me just add one more question and then we'll open it up. the european summit last week, we hear, thought maybe majors set -- made a major shia. the point was almost totally on austerity, trying to bring us. policies into place. but last week a summit talked about a comprehensive strategy for growth and investment in greek trying to encourage some of the things you said in your remarks about getting the economy going again. elaborate a bit on that. how soon do you realistically see a prospect for resuming positive growth? and with the kind of pro-competitive steps you're trying to take, what might be a reasonable grocery to expect over the coming five years or so? >> as you know, austere is but a
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name for financial discussion. and also for competitiveness of our state, of our national economy. but for the needs of this discussion i can use like you the term posterity. it is the precondition for our final target, our final target is to achieve our financial independence. and also to reestablish the name of greece. without sustainable public debt, it's not possible to implement program of austerity for competitiveness. with the result. we need a sustainable public debt in order to present the sacrifices of greek people and cultural, national economy.
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and now, we have very important and very attractive understanding with our partners, with eurozone, european commission, ecb, with the imf, about the need and the priority to make the greek public sustainable. and now, we have new instruments, new measures, new guarantees for the sustainability of greek public debt. this is the condition for the successful implementation of the austerity problem. on the other hand, the privatization program is the program of structural changes. and also, a very important fund, so-called fund, for this new mechanism. and also for the necessary
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breakthrough. because without new elements, new instruments, it's impossible to make, organize this breakthrough. >> let me ask my colleague, jacob kirkegaard, if he has a follow-up question, and then we'll open up to the floor. >> thank you, fred it and thank you, mr. minister for your candid remarks. following up on fred's question regarding the prospects for growth, you mentioned the marshall plan and perhaps as much as 20 billion available from the european commission structural funds and it european investment banks with very limited, if any in fact, domestic recall financing requirements. so get someone if you to be slightly more specific about how are you going to make this money go to work? what is the sectors that you envision where actually you can have the maximum growth
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enhancing impact of 20 billion, as you mentioned, up to 20 billion euros? is it solar energy? is infrastructure investments? what are some of the sectors where we can expect the greek government to try to put money to work to kickstart growth? >> thank you very much. i have to point. the first point is the new element of the public discussion within the european union about the so-called european marshall plan for greece, according to the new rules of the european union, especially for greece, we can use the european funds without national contribution for the first period, for the next five years. this is very important for our budget and also for our real economy. this is the main new element. it was billed to use european
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funds without greek national contribution. this is the main thing. the second point is about the sectors. the second field is always the different infrastructures. because until now deficit on infrastructure. the second is without doubt energy. the third, tourism. and, of course, we have before us the great challenge for the real estate. i repeat the same answer. i don't know if my answer is clear for you. >> thank you very much. okay, the floor is open. we have to standing microphones. we have a traveling mic, and so please identify yourself and then fire away.
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>> thank you for taking the time to come here. so, by your own estimates, the debt swap would reduce the debt to gdp ratio about 10-12 percentage points. with debt sustainability, using debt to gdp ratio is supposed to be kept 172%, 12 percentage points would make it 160. i'm wondering how is that still sustainable? and in one if you can get anytime on the bond swap agreement, and egypt they should ask the i am have for a second loan today? >> okay. i start with your first question. this 12% of buyback is the first contribution through the program. it's not independent pillar of this program, but additional result for implementation of
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this program. and this is just the first step. the most important point of such mechanism under the auspices and with the necessary financial attachment of efsf. we can use others for more issues that buyback, and the issues are and vision -- are ambitious. they are on target and. the 12% is not the final result of the buyback, but just the first step. the first proof about the possibility to organize in the secondary market. we have also some other very important buffers. we have the possibility to use
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the revenue from the second of -- 22 billion after 2014. this is my first answer, my first reaction. >> mr. minister -- >> because now, if i might, the first point for us, the answer point is to implement the new program to organize as soon as possible the psi. the psi is now under the greek ownership for the organization of the procedure. in cooperation without -- with our european partners, with imf, in cooperation with the
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coordinators and with our legal and financial advisors. we are ready to start as soon as possible. because we must ratify the situation and we must implement the new system. this is innovation. this is new. because of that we must cooperate with all the critical factors because without the mobilization of the community and the goodwill of everybody, just possible to implement this ambitious pro gram. the second target is to implement our own program through the domestic political light increase. and just after we come prepared, the second and the other steps,
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we must go ahead, must go ahead on fast track or. and because of that, i insisted on implementation, delivery, and also readiness to implement this new because revenue momentum. so we must exploit this momentum. have the impression that the professor have the necessary knowledge and experience to give the answer for your next, second question about the balance. >> please, professor. >> if i can say something on stability. i think as you said, you werex going to start from level ofñ?
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177%. this may -- >> growth. because we must make also the dissension between gross and domestic. this is something very important for ability and stability of ou departments. which is considerably lower tha the markets are looking at.?ñ? now, you could say 22 percentage points out of that, this takes is to 148.yz then if you take another 10 percentage due to debt buybacks which is in the program, as well as changes below par, this takes us to 158. so we start from a stock leveln of 158%, then interest and growth. okay, let's start with interest. if you have seen in the newspapers the net present valu
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of the psi, private sector involvement, is about 10-20%. now, 10% of that is because changes below par.ñ the remaining 11% is lower interest rates. so, the private sector willy continue with somewhat lower interest rates. for example, the next four ork five years i think it will be a round÷ 4%. this is the agreement with the private sector. the most important thing, however, that has to do with debt servicing and interest rat applied has to do with interest rate. we have a little more than 100 billion now -- >> 125% spent a little more tha 100 billion which will be given, this is a little less than 170, which will be given to us at the rate of to point a 5%. than another about 40% from last
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year's pro them which will also be. so once again, at least 40% of debt that's going to have an interest rate of 3.5%. talking about greece here as a aaa country. [inaudible] >> we still have buffers. for example, we've already borrowed 50 billion, which is not that lower interest rates but may come later. if this comes in, talking about 6% of the debt at 3.5 currently. less lower interest rates from the private sector. let me go to the second table. this is the prime plus surplus. primary surplus want to have your ago of minus 10%. at the end of this year it's going to be minus .8%, very
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close to zero. this changed of nine, more than nine percentage points in two years took place and in front of severe recession. if you take the cyclical disaster, primary surplus, then you'll see that this takes us t about plus .5%. we are aiming at five and a half to 6%. we are three to four points away. and that will be on in the first two years. if you look at other countries, for example, the u.k., minus 3.5%. i don't know, my fight or whatever. añ number of countries.÷ so we're making a lot of progress here. and then let's take growth.
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probably the most important variable. where can this come from? i think that are advantages that greece has over the others of the euro zone. the first advantage is that greece has been the most stimulated economy in the euro, probably the last communist country in the euro. i can tell you many examples about that. [inaudible] >> what? yes, we must avoid that. [laughter] the thing is i can give you a number of examples. for example, a number of tax today is the same with in 1971. that's 40 years. do you know how may times the gdp has increased been? and a number of all these liberalized, for example. so the impact of the regulation, the economy is the first source over and above the average of
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the euro zone. the second thing is greece is a country with greatest state ownership and intervention, public intervention in europe. now, by selling all these assets we are, apart from reducing sovereign debt, we are introducing efficiency also and a common. no other country in europe has advantage that greece has. then for example, we have lowest label of participation in europe. i mean, i think between six or seven percentage points, lower than the average in the e.u. give you for factors that i think contribute. we have the largest underground economy. why this may be advantage? because this is the potential to pull resources from and lower the average expectation. so i think for these -- thank you. >> 's we will leave this
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discussion at this point as the u.s. senate is about to return from a brief recess. general speeches in the senate for most of the day. during this morning session majority leader harry reid says he plans to bring his version of the debt and deficit reduction measure to the floor later today for debate. during that come he also reached out to republican colleagues for help in getting that bill passed. we are also their in house republicans are making changes to the plan. the planet failed to get in the republican support yesterday. they may bring up that bill for debate today in the house. of course, you can see live coverage of that on a companion network c-span. and now to live coverage of the u.s. senate here on c-span2.
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senate will be in a period of morning business until 12:00 noon with senators permitted to speak therein for up to ten minutes each, with the time equally divide i ha divided andd between the leaders or their designees. mr. durbin: mr. president, this is an historic weekend in washington. those who are visiting the capitol and following the proceedings, i think, understand the gravity of the decisions that lie before us. on august the 2nd our debt ceiling expires. that has never happened in our history. one time there was a technical
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period of a day or two, but there's never been a long period of time when the united states of america basically defaulted on its debt. and it's a very serious matter. it's one that affects our nation, our debt, and literally every family and business that live within our boundaries. and here's the reason why it's so important: in 1939, we created this law which said that a president could come to congress periodically and ask for the authority to borrow money to pay for the things that congress has already appropriated. so when members of the house and senate say to the president of the united states, as an example, we want you to continue to wage war in afghanistan at the cost of $10 billion a month,
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this president knows that he will have to borrow about $4 billion a month to meet that congressional appropriation. you see, we borrow about 40 cents for every dollar we spend. similarly, when it comes to the payments that we make to our veterans, who are disabled, we have promised them we will pay you, because you served our country and you lost a limb or you were injured and we will compensate you for that loss for the rest of your life. we need in making that commitment that we're also making a commitment to borrow the money necessary to do it. so periodically a president will come to congress and say, i understand our obligations which you have sent to me and i have approved, and now i ask you to extend my authority to borrow the money to meet those
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obligations. that has happened 89 times since 1939. since we passed this law, presidents of both parties have come to congress and asked for that authority. and aceman as i mentioned, not d congress say "no," beyond that one technical period in, i believe, 1979. 89 times -- 5 times by republican presidents -- 55 times by republican presidents and 34 times by democratic presidents. when you look at the presidents who have requested extensions of the debt ceiling that i have just described, the president that hoed holds the record is president ronald reagan who in an eight-year period of time asked to have the debt ceiling of the united states extended 18es times, more than twice a year. during his presidency, the debt of the united states during the
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ronald reagan presidency tripled. that's why he came to congress so often. the president who ranks second in terms of increasing our national debt during his eight years is president george w. bush. the debt of america virtually doubled during his presidency because we waged two wars that we didn't pay for, we did something we'd never done in our history -- cut taxes, particularly for the rich inned midst of a wa -- particularly fr the rich in the midst of a war, and so president after president has used this statutory authority to come to congress to ask for authority to extend the debt ceiling. president obama has done the same. and as of august 2, his authority to ask to borrow money will expire. now, that is a serious moment if we default on the debt. it'll be the first time it has hopped in our history.
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what will it mean to the united states to default on our debt and fail to extend the debt ceiling? well, imagine if you decided as a homeowner to stop making your mortgage payments? within a period of time, you'd receive a phone call from your creditor saying, uh, did you forget your check this month? and if you say, no, i'm just not going to say it you understand the consequences. your credit status is going to be affected. the united states credit status is the best in the world. we have a aaa bond rating, the highest of any nation. and because we have that high bond rating, we have the lowest interest rates that we pay to borrow money. well, go back to the homeowner. if you had you've just defaulted on your mortgage, your credit report is going to look pretty . the likelihood that you can turn around and br money next month is in doubt.
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if someone can loan you money, it will be at a higher interest rate because you are a risk now. you failed to make your mortgage payment. similarly, if the united states fails to extend the debt ceiling, our credit rate willing go down from aaa, the interest rate charged the united states government will increase, and what has been considered the rock-solid best economy in the world will be jeopardized by this action. what does it mean for the interest rate on the united states debt to go up? this calculation has been made by many, and i believe it's accurate. for every 1% increase in the interest rate the united states pays on its debt, we will add $130 billion a year to our debt. $1.3 trillion roughly over a ten ten-year period of time. so the failure to extend the debt ceiling, the default of the
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united states and higher interest rates will make our debt worse. that's why what we're facing this week in washington is so terrible. because what we're dealing with here is a politicall politically-manufactured crisis. we are dealing with a self-inflicted wound. because the house republicans under speaker boehner refuse to extend the president's request for the debt ceiling when our current authority expires august 2, we could find ourselves paying higher interest rates, even deeper in debt, and it gets worse, because when the interest rates paid by the united states government go up, interest rates across our economy go up. what it means is that a lot of innocent people who are borrowing money to buy a car or
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a home or to pay for college loans or to pay off their credit card are going to pay more. it is like imposing a tax on every family and business in america at the worst possible time. we are recovering from a recession. too many people out of work. bbybusinesses need to expand and borrow money. raising interest rates stops that. this doesn't have to happen. this self-inflicted wound by the house republicans and speaker boehner does not have to happen. now, in fairness to speaker boehner, his goal is to reduce america's debt. i accept that challenge. in fact, for the last year and a half, i have engaged personally on a bipartisan basis to meet that challenge. first as a member of president obama's deficit commission, the bowles-simpson fiscal commission. we set for months and listened to testimony and finally 11 out
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of 18 of us voted for the report that was issued. when wha it came up with -- what it came up with is a 10-year plan to reduce our debt by $4 trillion. not easy. it sound like it would be easy when you look at all the money we spend. but when you get into the specifics, it's politically painful. but what we agreed to do was to put everything on the table, and i want to tell you, i did that with some reservation. i am concerned about many things in our country but two things in particular. i am concerned about the most vulnerable people in america, those who are aged, poor, and sick. and i want to make certain that at the end of the day america still has a safety net, that this good and caring nation is doing everything it can to help these people. what programs do they rely on?
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they rely on the earned-income tax credit, medicaid, the health insurance that covers a third of the children in america, and many elderly people in nursing homes. so when we talk about cuts in these programs, i was very sensitive to them and determined to make sure that we didn't cut anymore than necessary to reach our goal. we also put on the table reven revenue. we have to do that. how can we ask working families in america to pay more on their children's college student loans and be prepared to sacrifice, how can we ask to seniors in america to be willing to sacrifice had this comes to their medicare program and not turn to the wealthiest people in our country and ask them to join in this sacrifice? that has become the major stumbling block in this negotiation. you see, republican speaker
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boehner has said, i will not accept any -- underline the word "any" -- tax increase on the wealthiest people in merge i will agree, he said, to cut everything else. every other benefit for every other person, but not one more penny of taxes on the wealthiest people in america. that doesn't strike me as fair or just or reasonable. but that's where we are. we also put on this program spending cuts, substantial spending cuts, so that every single program in america would be closely inspected, reduced in spending, and move us toward a deficit-reduction goal. then i went a step further. i joined with five of my colleagues, three republicans and three of us on the democratic side, and we set down for six months and worked on something called the gang of six and came up with a specific plan of how to do this. well, mr. president, you know we had a meeting a couple weeks ago and we invited most of the members of the senate to come and listen to what we had
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proposed. 49 senators showed up, democrats and republicans, in a room not far from here, and listened as we laid out what we considered a bipartisan plan to deal with the deficit. we then went back to those senators and said, how many of you will put your name on the line to join us in a bipartisan effort to reduce the deficit, and we're now up to 36 senators who've done that. over a third of the senators have signed on to a bipartisan effort to reduce the deficit. what a sharp contrast that is from what's going on in the house of representatives. where right now the speaker of the harks the republican speaker, is negotiating only with republican members to pass a plan. mr. president, i don't think that's what the american people sent us to do. i don't think they said to democrats, come to washington but don't speak to republicans. or to republicans, come to washington and don't speak to democrats. the bottom line is, democrats and republicans, notwithstanding, we're all americans and we all have a
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responsibility. so here we are today at this impasse. and speaker boehner announced monday night when he had a press conference at the same time as the president with an announcement to the nation, that he had a plan, it called it a bipartisan plan, that he would pass in the house of representatives. we expected that to happen tuesday and it didn't. and then wednesday, and it didn't. and then yesterday, and he failed to pass it then, too. we waited all night until 11:00 when we finally adjourned for the speaker to pass what he considered to be a good plan and for us to react to it. now we hear the speaker may be able to get to it later in the afternoon, in the early evening hours. mr. president, this is unacceptable. the presiding officer: the senator has used ten minutes. mr. durbin: i ask unanimous consent for five additional minutes. the presiding officer: without objection. mr. durbin: mr. president,
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that is unacceptable. by my calculation we have four days left before we default on our debt, four days left before the american economy suffers this mortal blow, four days left before we gault on america's full faith and credit for the first time in our history, for four days left while businesses across america are beholding agreements and negotiations that create jobs, four days left where the american people have to worry that if we default on our debt, that the government will have to pick and choose those who will receive government checks in august. the senator from pennsylvania came to the floor for the last two days and said, oh, if we default on the debt, we can manage that. really? if we default on the debt we'll have $172 billion to spend and $306 billion in obligations. he said, well of course we have to pay interest on the other debts. we don't want to default on everything. okay. and he said, of course we have
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to pay everybody under social security. yes. and he said, of course we have to pay our soldiers who are in combat. agreed. all good ideas. and he said, then we'll work the others out. who did he leave off the list? he left off the list every federal employee. that would be all the people working at the central intelligence agency monitoring terrorists to stop them from attacking the united states. that would be the air traffic controllers in our airline system across america. that woue the federal prison guards working in federal correctional facilities. that would be all of our veterans receiving disability checks. easily managed? not so fast. it wouldn't be easily managed. there would be losers in that process, and many of them are innocent people that would be lost to the frustration of this political process. mr. president, there is a way through this, but the only way through it is if members of both
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parties come together and do it quickly. i don't think it's going to happen in the house. the house has decided they're going to do an all-republican, all-day approach. that isn't going to solve the problem in the house or the problem on capitol hill. this morning the majority leader, harry reid, standing at this desk, turned to senator mcconnell from kentucky, the republican leader, and said, "now it's our turn. now we have to step up. now we have to come up with a bipartisan approach and show leadership." senator reid was right. senator mcconnell has demonstrated in the past that he's been willing to do that, and now more than ever he should. i think that the 36 senators who stepped up, joined me and others in saying that we can find a bipartisan way to deal with this, must be heard. our voices must be heard. but more importantly, the spirit of compromise must be heard. that is what the american people expect of us.
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they didn't send us here, each of us, to win every battle under our own terms and not give. they sent us here to govern and to respect this great country. i would sincerely hope that we will approach the next 72 hours with the spirit of humility, humility to understand that so many innocent people across america, families and businesses, are waiting on us and counting on us. we cannot fail them. no one will care at the end of the day who has the great political headline. but we will all be judged, democrats and republicans, house and senate, as to whether we met our constitutional obligation to this nation and the people who live here. mr. president, i yield the floor. the presiding officer: the senator from alabama. mr. sessions: mr. president, the challenges we face are difficult. i am proud of the work that the
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house of representatives has done. i don't appreciate it being suggested that somehow they're unreasonable because i don't believe that's fair to say about them. they worked very hard. they complied with the congressionally mandated statutory requirement to pass a budget. they passed a ten-year budget that was honest, open. it was publicly debated in the house of representatives. they passed it, and it would have fundamentally altered the debt trajectory of america. it would put us on a sound path. it could have gone a little further, frankly, but it goes further than anything else we've seen and put us on the path to a sound economic future. and what happened in the senate? i'm ranking republican on the senate budget committee. the majority leader, the leadership of the democratic party in the senate, on the eve
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of us beginning to mark up a budget in the senate, as we're required to do by law -- it doesn't say you go to jail if you don't follow the law. it doesn't have any penalty; i'll acknowledge. so it's a law, but we don't have to follow it. but we certainly have an obligation to do so. certainly we would want, i think, to have a budget in the senate, and we haven't had one now for over 800 days, over two years. and so we were within a week or less of that of commencing hearings to mark up a budget that would be moved by the democratic majority. and when they do so, they don't have to, it's not subject to a filibuster. it can be passed with 50 votes, 53 democrats in the senate. and the majority party always has that obligation to move a budget. senator reid, the democratic
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leadership, decided they wouldn't do it. he said it would be foolish to have a budget so we haven't passed a budget. the house spending would reduce the budget by up to $6 trillion. and by -- reduce spending by up to $6 trillion. because of the senate's objection and the president's objection, they've agreed to raise the debt limit by $1 trillion, and they've agreed to just cut spending in america by $1 trillion, trying to reach an agreement so we wouldn't have a shutdown. and then all of a sudden my democratic colleagues now come forward and say they don't want to accept that, that they want the reid amendment. and the reid amendment has the same actual savings. and we've looked at the numbers. we've seen how they've done it. and it's about $1 trillion
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savings in the reid bill reduction in spending, about $1 trillion. but he claims it's $2.7 trillion, almost three times what it actually achieves. and, therefore, they're going to continue raise to* raise the debt limit, the second largest amount it's ever been raised, almost $3 trillion. why? because the president said -- this is what the president said a week ago, "the only bottom line that i have is that we extend this debt ceiling through the next election, until 2013." close quote. the president thinks this is about him. it's all about him. this is about america, what's
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good for this country. it's not about the president. it's not about politics. if it was about politics, i wouldn't vote for the boehner amendment and neither would a lot of those patriotic members of the house because it's not enough. it does not do what we need to do. we need to do $4 trillion, $5 trillion, $6 trillion over ten years. the debt is going to increase over the next ten years from $9 trillion to $13 trillion. $1 trillion is not enough. it can only be seen as a step in the right direction. so forgive me if i'm a little frustrated about that. now, i want to talk about something that's problematic and we need to know about, not being focused on, and this is senator reid's amendment, his solution to the deficit problem, raising
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the debt ceiling so we can keep borrowing money and spending more than we take in. and we are borrowing 40 cents of every dollar we spend. the president this morning said he liked the reid amendment. that's what he'd like to see. he doesn't like the house version. but i think there are some things we all ought to think about and know that's in the reid amendment. as i said, we've gone 821 days without a budget. the law requires us to have a budget. a lack of a congressional budget contributes to our fiscal nightmare. since we've not had a budget, we spent $7 trillion. and the reason we don't have a budget is because it's carefully, deliberately orchestrated that we not have one by the leadership of this
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senate. and they have planned for just the eventuality that's occurring, and i have warned about it for weeks and months on the floor of the senate, that we would be at the 11th hour with people scurrying around in secret plotting deals to try to figure out how to deal with the crisis this nation faces. that's exactly what's happening. today it was announced that the second quarter economic growth was just 1.3%. anemic, well below what we were hoping to see and thought we might. and we've had expert testimony that the debt we have pulls down economic growth. had the senate adopted a budget in a timely manner this year as the house did, we would not be at this last-minute crisis. but it was deliberately orchestrated because it gives maximum leverage to the president and press people.
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the question not is what's in the deal, but do you have a deal? just do anything. we're going to be in a crisis if you don't pass something. we just want a deal. so the house is, has come up with a very, very reasonable compromise. but it looks like some people just want to have this fuss and put us through the crisis, even when they get basically what they've asked for. now the reid amendment to increase the debt limit deems two consecutive budget resolutions for fiscal years 2012 and 2013. in other words, it basically takes over the budget process and sets the basic spending number. does the president think the senate should go two more years
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without crafting or passing a budget? we've already gone two. the reid amendment sets spending allocations for most senate committees at the congressional budget office's rising baseline. these are bureaucratic members. they work hard. but they're not elected. they're not constitutionally accountable. so it just says we're going to deem the amount we spend, what c.b.o. has projected our growth and spending to be. and c.b.o. projects growth in spending. they don't set that as right for america, but they project that's what will occur under current circumstances, and it just deems those high growing numbers as what should be. so without hearings or debate on these allocations, this provision would provide a further excuse for avoiding a budget and increase the likelihood the congressional budget office will be violated -- the congressional budget act will be violated for
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the third straight year. this is an abrogation of the responsibilities of the senate and of the budget committee of the united states senate. we were not elected to the senate and chosen to serve on the committee on the budget, as the presiding officer is a member of that committee, we weren't chosen to sit on the budget committee to see most of the budget levels automatically raised based on a set of spending growth projections by some apparachix in the c.b.o. i shouldn't demean them. they just do what their duty is. it is this type of process that placed the country in a financial crisis. we keep locking in spending levels that are going up. and when we reduce a little bit the growth and spending, you know what we say we're doing? we're cutting spending, and
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spending more. that's the way the budget is. when they say, say we're going to save $1 trillion through the house plan -- the presiding officer: the senator's time has expired. mr. sessions: i thank the chair. i would ask for two additional minutes to wrap up. the presiding officer: is there objection? without objection. mr. sessions: so, the provision that takes over that and sets us on an automatic growth course is not the right one. i would just note that when we say we save $1 trillion over the next ten years by the bill that senator reid has, and it does about $1 trillion and so does the house bill, it does about $1 trillion -- the difference is how much a raising of the debt ceiling is achieved by that. senator reid wants almost three
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years, two years. and the house members would do it based on a dollar-per-dollar. but that $1 trillion does not reduce spending. it only reduces the growth in spending, and that's one of the reasons we're able to hide congress; the amount of money we're spending every year. that's one reason the debt is so high. the budget committee should be allowed to fulfill its duties. the budget committee should be allowed to mark up in fiscal year 2012 -- it will begin october 1 of this year. we need a budget now. we're past due. once a budget is adopted by the committee, it should be taken to the full senate, allowed to be amended as the law provides. and i'm disappointed that the president doesn't seem to agree with that. he seems to have bought into the idea that the regular processes of the senate shouldn't be
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followed. he agrees with senator reid apparently that if they can just keep it all bottled up to end, when we come up on a crisis, they can all maneuver in secret and cut a deal, and that that's the way we serve the american people. so, mr. president, i thank the chair. i feel real strongly that we are undermining the great power and responsibility of the senate to be that place where the great issues are discussed publicly and openly. -- the members go on record and he's protecting his members from having to do the primary
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responsibility of a united states senator that is before the world to cost their vote, to be reasonable for it and to be accountable to the people who sent them there and it is not good nor this body, this body should have been engaged in an historic debate about the threat the debt poses to our future, and we have been unengaged. discussions are being taken in secret without the american people being able to hold their representatives accountable. i object. i thank the chair and would yield the floor. the presiding officer: the senator from missouri. ms. mccaskill: i try to listen very carefully to folks at home, and i would not quarrel with my friend from alabama in saying that it's very clear to me, it's been clear to me for a long time that missourians were very, very
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worried about spending in the federal government. in fact my friend from alabama and i started work on this before -- if you can say that we were trying to cut spending before cutting spending was cool, he and i were working these floor -- this floor for votes to try to do something about spending long before last november's election. mr. sessions: mr. president? ms. mccaskill: yes? mr. sessions: i thank the senator for recalling that event. i know that you've continued with another proposal, working across the aisle, to have a proposal that has potential to go do more -- be more effect think of -- be more effective than the one we worked often last year. so i thank the senator for being willing to work in a way that could be effective to do better. ms. mccaskill: thank you. thank you, mr. president. and i thank my friend from
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alabama. there is nothing wrong with walking across the aisle and finding common ground and, frankly, it's kind of what i thought would be common when i came to the united states senate. that's kind of what i'd learned in the history books, that that would be common. i have been watching what has been developing knowing that my folks at home want us to cut spending. i certainly have been part of that and wanted to cut spending, and i watch this debt ceiling approach, and it is like watching a movie and watching a car driving along and you're like in a camera above it and you see what's ahead, and you see this cliff. and you see this car driving towards this cliff, and you're thinking -- you start tensing and you think, oh, surely they're not going to go over the cliff. well, they have an opportunity to avoid going over the cliff. they're not going to go over the cliff. we're not going to see these people die, they're not going to drive over that live, they're not going to knowingly drive over a cliff. and i've been thinking for the
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last several weeks, well, there's no way that people that are elected because they love their country are going to let the car go over the cliff. and i got to till, i'm worried. now what do we have to do to keep from going over the cliff? make no mistake about it, it's a cliff. it is an historic moment for our country. never before in the history of our country have the world markets been worried about whether the united states of america will pay its bills. never has that happened before in our history. so what does it take? well, it's not complicate what had at that takes. it takes one basic thing: compromise. to keep from going over the cliff, all we have to do is compromise. and i will tell you, reading my mail and listening to phone
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calls that have come in on the answering machine -- and i am going to take phone calls myself over the weekend -- you know what missourians are now saying? please don't go over the cliff. please compromise. i'm confident that's what most missourians want. and compromises have already occurred, big compromises. most of us on this side of the aisle really believe that the way we get at our long-term debt structure is a responsible approach that includes some revenues. now, i'm advocating cleaning out the goodies in the tax code so we can lower some tax rates. i don't understand how you can at the same time vote to gut the medicare program and vote to continue writing checks to big oil. i cannot imagine that i would vote to keep writing a taxpayer check to the most wealthy and
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profitable corporations in the history of the world at the same time i was voting to put medicare on a voucher program. saying to seniors, you know, if you're 83 and you got three chronic illnesses and you run out of medicare coverage, you're on your own. i can't imagine doing that. but we compromised. we compromised and said, okay, we'll set revenues aside for now. you won't vote for revenues, republican party, members of the house in the republican party you'll not vote for revenues, we tack revenues off the table. so some people in our party were not happy with that. i got those phone calls. why did you capitulate, why did you give in? we gave in because we care about our country and we don't want to go over the cliff. that's why we gave in. so we gave in on revenues. the republicans wanted us to cut spending by more than we raised the debt ceiling. it's a political thing we need to do, not required by the economics, but we've done that.
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so now we've put revenues aside, compromised, we have said we're going to cut spending by more than the rise in the debt ceiling. now the only thing we've not compromised on, the only thing, which i think is really when you think about it -- i didn't think frankly this may have been as big a deal until i stand here today, that is to do this again in six months, to leave this loaded gun on the table? we're going to leave this loaded gun on the table for our econo economy? when you talk to small businesses right now, and they are scared about what's going to happen next week. will they be able to borrow money? will people be able to afford to borrow money to buy cars? will they be able to afford to buy borrow money to buy homes? you talk about the economy going into a tailspin and we want to keep that loaded gun on the table for another six months? there is no way we can provide the certainty in this kind of economic climate if we leave the loaded gun on the table. so the only thing that we've not
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agreed to that's in the boehner plan -- well, it depends on which plan it is; they keep changing it to try to get enough votes. but the only thing we are not going to budge on is saying to this country and our business community and job creators, we're going to kill job creation for sure for the next six months by telling you we want to repeat this ridiculous exercise in six months. we're not going to do that. and the irony is the people who want us to do that are the people who have been preaching certainty. we've got to have certainty. by the way, let's do this again in six months. we've got to have certainty. it's really important we do this again in six months. now, i know that the leader is working on trying to get a compromise today and i'm confident that before the someday over there'll be some kind of compromise that will be before this body that we'll have a chance to vote on. and i will tell you this: you will never hear me brag about refusing to compromise. some of my colleagues from
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missouri that serve in the house of representatives are willing right now to brag about refusing to compromise. they're willing to say it's a good thing to go off the cliff. i will never brag about refusing to compromise. because i don't think that's what we do here. you look back on history and america's brightest moments usually happened around the table of compromise. those most difficult questions that this country has wrestled with through the years, we have forged our way forward through compromise. and that's what we need today. that's what we need tomorrow. that's what we need as we approach the edge of the cliff. so my last message i leave my colleagues across the aisle: we have shown our willing ness to compromise. please though us yours. and allow us to vote, allow us
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to vote on the compromise. if you don't want to vote for the compromise, then don't vote for it. but allow us a chance to vote for it. is that too much to ask? just to allow us an opportunity to move to a vote, to avoid this country having a diminished status permanently in the world? i don't think that's too much to scvment so let us vote, and if you can't compromise on the substance of the compromises that will be put forward, at least allow our voices to be heard by allowing a vote. thank you, mr. president. and i yield the floor. mr. president, i ask that the quorum call be equally divided and suggest the absence of a quorum. the presiding officer: without objection, the clerk will call the roll.
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quorum call:
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quorum call: mr. reid: mr. president? the presiding officer: the majority leader. row. mr. reid: i ask unanimous consent the quorum call be terminated. i ask unanimous consent that morning business be extended until 3:30 this afternoon with senators permitted to speak for up to ten minutes each and at 3:30 the majority leader be recognized. the presiding officer: without objection. mr. reid: i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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a senator: mr. president? the presiding officer: the senator from south dakota. mr. thune: mr. president, i ask unanimous consent that the quorum call be dispensed with. the presiding officer: without objection. mr. thune: and i ask unanimous consent to speak for up to 15 minutes. the presiding officer: without objection. mr. thune: mr. president, i want to remind my colleagues that this work period was supposed to be our opportunity to finally enact, after years of delay, the free trade agreements
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with our allies south korea, colombia and panama. these agreements were signed over four years ago, and this administration has had more than two and a half years to submit them to congress for consideration, but they have failed to do so. unfortunately, we are going to have to continue to wait at least until september before we get a vote. why does it matter that we pass these agreements? it matters for two reasons, mr. president. first, because expanding trade opportunities creates american jobs. second, because we live in a competitive global economy, and other nations are not standing still while we delay. economists overwhelmingly agree that expanding trade opportunities creates jobs. the obama white house, for example, estimates that enactment of these three trade agreements will boost exports by at least $12 billion supporting over 70,000 american jobs. the fact that lowering barriers to u.s. exports will create jobs for american workers is just
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common sense. consider that our market is already largely open to foreign imports, including those from korea, colombia and panama. without trade agreements to ensure similar treatment for our exporters, american businesses will continue to face high tariff and nontariff barriers abroad. consider just one example. the market for agricultural products in korea, which is the world's 13th largest economy, korea's tariffs on imported agricultural goods average 54% compared to an average 9% tariff on these imports into the united states. 54% added on for us to give our agricultural products into korea, only 9% for them to get those same products into the united states. that is a 45% differential, mr. president. passage of the korea free trade agreement will level this playing field. if this administration toeupbs delay sendinged -- continues to
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delay sending the agreements to congress, the obama white house would prefer holding these agreements hostage because of a desire to expand a trade assistance program rather than improve the competitive position of american producers. at a time of near record unemployment and slow economic growth, this delay is unacceptable. and i want to just put a fine point on that, mr. president, by just this morning the numbers came out, the bureau of economic analysis released its advanced estimate of growth in the inflation-adjusted gross domestic product, g.d.p., for the second quarter. and according to the advanced estimate annualized g.d.p. growth in the second quarter was just 1.3%. now if you look at, they went back and revised the first quarter of 2011, they revised it downward to .4%, down from a reported rate of 1.9%. they've adjusted downward the first quarter growth rate from
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1.9% down to .4%. we now know according to the advanced estimate at least that second-quarter g.d.p. growth is only 1.3%. way under what the assumptions have been, way under what the estimates have been and way under what it's going to take for us to get the economy turned around and growing again and get people back to work. couple that with the job-crushing regulations, the taxes that have come since this administration has taken office, mr. president, is making it very, very difficult for our economy to recover and to grow and to get back on track. and so, the administration would like to hold these agreements hostage because of their desire to expand the trade adjustment assistance program rather than get these producers back access to these markets that we should have access to in some of these countries. and we just can't afford to wait any longer to do that. the reasons are very clear. we've got an economy that is sluggish, that is struggling to
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get back on its feet. we have three free trade agreements that have been hanging around here, languishing literally now for four years that would open up export opportunities. and as i said, even according to the president's own estimates, add 70,000 jobs to our economy. well, the position of leader mcconnell and republican senators has been consistent from the beginning. we are happy to have a debate on the merits of expanding trade adjustment assistance and to consider this bill as a stand-alone measure. but we will not hold the trade agreements hostage to consideration of trade adjustment assistance. i want to commend my colleagues, senators portman and blunt, for the letter they recently spear heeded with ten other republican senators committed to support the necessary procedural votes to consider trade adjustment assistance as a stand-alone measure and on its own merits. in light of this letter, it's very clear that the administration has run out of excuses for not submitting the trade agreements to congress. and i would ask unanimous
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consent, mr. president, to be able to enter the portman-blunt letter into the record. there is a path forward in both the house and the senate for trade adjustment assistance, and we have bipartisan majorities in both chambers waiting to vote for the korea, colombia and panama agreements. so why are we still waiting for the white house to do the right thing and send us these agreements? it's ongoing delay is having a real impact on american businesses, and it will only get worse. on july 1, the european union-korea trade agreement went into effect. according to press reports, european exports to korea rose 16% in the first 13 days after the korea e.u. free trade agreement entered into force. now let's be clear, mr. president, about what this means. korean consumers are choosing to buy german, french and british cars, electronics and
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agricultural products rather than american-made products because these european products now have a price advantage. this was entirely preventible if we had acted on the u.s.-korea agreement sooner. likewise, the canada-colombia agreement will go into effect on august 15. this will result in an advantage for canadian goods such as construction equipment, aircraft and a range of other industrial and agricultural products. much is with korea, united states businesses will find themselves at a competitive disadvantage because we have failed to act. again, this did not have to happen. the administration finalized its labor action plan for colombia back in april. we've had plenty of time to consider these agreements over the past several months. instead we are facing a situation where united states wheat producers are likely to be completely shut out of the columbian market once the agreement with canada has gone into effect.
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this is amazing. you think about it. when you consider that just a few years ago american wheat producers dominated the market in colombia with a 73% market share. that was as of 2008. in 2010, for the first time in the history of the united states-colombia trade, the u.s. lost to argentina as position as the number-one agricultural supplier. consider the story of the three crops that we grow -- well, among the three crops that we grow in south dakota: soybeans, corn and wheat. the combined market share in colombia for these three u.s. agricultural exports has decreased from 81% in 2008 to 19% as of 2010. a decline of 62 percentage points. in a two-year period. 81% to 19% market share in corn, wheat, and soybeans for american agricultural producers.
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you think about that. that is a staggering collapse, mr. president, which was totally avoidable, totally preventible if we had simply acted on these trade agreements much sooner. this is the real cost of our delay. while our trading partners continue to pursue new regional and bilateral trade agreements. we're living in a global economy where america cannot afford to stand still on trade. senator baucus noted at a recent finance committee hearing, in 1960 exports accounted for only 3.6% of our entire u.s. g.d.p. today exports account for 12.5% of our g.d.p. exports of u.s. goods and services support over 10 million american jobs. it is long past time that we get back in the game by passing the three pending trade agreements. america's manufacturers, america's farmers, america's
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service providers cannot afford to wait any longer. and so i call upon the administration, mr. president, to submit the trade agreements to congress before the august recess. we're not going to be able to consider these agreements until september, but sending them to congress now will send a strong signal that this administration is finally serious about getting them done. it would also be good, it would be an important show of good faith to our close allies, south korea, colombia and panama. mr. president, these job-creating, market-opening trade agreements should be at the top of the agenda when we get back in september. and again, i just want -- i want to reemphasize the importance of that in light of these economic numbers, the data that's coming out that points out that in the second quarter of this year, our economic growth was a sluggish 1.3% and that the revised estimate now for the first quarter of t